State bonds would add jobs, not taxes

Each election season voters get a refresher course on government bonds. Most of the time the bonds are sold at the local level and voters must decide whether to increase their own taxes by approving this or that new multi-million project.

This familar process is what borough and city level government uses to fund infrastructure creation, things like new schools and roads.

But everytime we vote yes on a local project paid for with bonds, the mill levy or sales tax is increased a bit to pay back the investors who bought the bonds.

The process has served us well. It’s why Wasilla High School got a new roof this year and why we have a sports complex in Wasilla.

But when the state sells bonds we all get kind of confused because individuals do not pay state income tax in Alaska. Well, some would argue that fees and licenses amount to taxes. But there is not state property, income or sales taxes.

When we talk about state taxpayers in Alaska, really we refer to corporations.

So how do these bonds get paid back? We’ve been told the Legislature makes the payments out of the general fund. It’s an appropriation, just like everything else the state pays for in a year.

Which means that, with Proposition B, the Legislature has handed the voters a tool it normally reserves for itself: the ability to direct long-term state spending.

It’s worth noting that these bonds, like most government bonds, take multiple years to pay back. For Proposition B, it will take 20 years of annual $30 million payments to repay all of the nearly $400 million package.

So the Legislature is also handing voters a yoke that it may place on future legislators, obligating them to carve out a piece of each budget to make those payments.

In our eyes, the key difference between municipal bonds and state bonds is the question of taxation.

With municipal bonds a voter could decide he just doesn’t want to pay any more taxes and vote, ‘no.’ It might not matter to her that the school needs a new roof or that athletes would do better on turf playing fields.

But, since corporations can’t vote, nobody who will be blackening ovals come November really has any skin in the game.

This time voters will decide based on their personal criteria whether they think investing state tax dollars in infrastraucture creation is a good idea.

And as we’ve mentioned in the past, capital projects — such as the $400 million included in Proposition B — equal jobs.

Does the University of Alaska Anchorage merit an arena?

Should the state build a new research facility on Near Island in Kodiak?

And, most importantly for Valley’s voters, does Mat-Su College warrant a $23.5 million theater and classroom building?

Will that building, as its supporters promise, help give the college more of an identity? Will it help meld students there into a community? Do we want to give our students better facilities in which to learn to be paramedics?

Come November, voters should consider carefully the advantages of this state bond sale.